Saturday, July 01, 2006

Why Only the Minority are Rich - 5 (The Weird Factor - Secret of Wealth Creation!!)

The Plain old WeirdI don't normally use the word weird because its meaning is too encompassing. It is one of those words that can be applied to all things, all people and all situations depending on the angle of observation. This is precisely the reason I am using it now because EVERYTHING to do with getting rich, i.e. the road to it, the inheritance of it, the use of it, the spreading of it, the earning of it and the giving of it depends on something that is weird.

What do I Mean?Here are some synonyms for weird: strange, odd, bizarre, peculiar, uncanny, eerie, creepy, unusual. But don’t misunderstand, wealth itself is none of these things, it is the journey (short or long) that takes one to it that I am describing as weird and moreover I am saying that all such journeys are weird. So let us all try to understand this weird journey. To add a little humour to our discussion, I’m going to paraphrase what Rockefeller said when he was asked what the secret to wealth was. He replied: "To bed early, rise early and strike oil."

The real meaning behind this statement, to me at any rate, is that the question is absurd. There is no secret. It is not mechanical. There is no set of instructions that guarantees wealth if you follow it. This is why the road to wealth is ALWAYS, without exception, weird.

Consider the following formula that I've devised to explain this:

M = ETW – O

You many read this as follows: Money equals Effort times Time times Weird minus Outgoings. The left hand side of the formula is purely materialistic whereas the right hand side is humanistic. A person puts in effort and time. We can scale the effort as a number between 1 and 10 inclusive. So anyone with an effort factor of 1 is very lazy whereas an effort of 10 means he or she works very hard. As for time, we'll make this a number between 1 and 24 to represent the average time spent on this activity in any one day.

We can apply this to anyone who is doing something to make money. Let’s straight away apply the formula to someone who has an ordinary job which pays an average salary. Let E = 5 and T = 8. So for one day we have:

M = 5x8xW - O = 40xW – O

But what possible number shall we give the weird factor. This really is the unknown because it is not limited to the amount of possible effort or the number of hours in a day. So what is it? Well, for this type of activity, i.e. an average job, the weird factor largely depends on the market value for that particular job. But without going into all of the different types of job and how well each pays, we can scale the weird factor to a number between 1 to 100 where 1 represents the lowest paid and 100 represents those in the highest wage bracket. But we really want a scale that can represent all people in all activities, not just the plain old employee. As it turns out, there are really only two divisions to consider. Those that work for others and those that work for themselves. So we need only consider two scales. Those with jobs as we’ve already stated are in the 1 to 100 scale but those who work for themselves, the scale is, and you’ll get a shock, -1000 to 10000. Yes, the scale must start from a negative number because working for yourself is risky which means you may in fact lose money but how much you lose is controlled largely by other parties such as creditors. At the same time the rewards are potentially phenomenal. All we have to do now is subtract the outgoings and we have found how much money we have made in one day. So getting back to our ordinary employee to whom we may attribute a weird factor of 6 gives us:

M = 5x8x6 – O = 240 – O

The outgoings aren't that important because this is probably the easiest factor to control since we can choose to spend or save. So for someone who does not save, the daily outgoing number is close to the earning or more if there is some borrowing involved.

In case you are still wondering where lies the secret if there actually is one, I can now reveal it. The only thing in the formula that is the LEAST in our control is the weird factor. It also explains why it is possible to have two neighbours living in the same area, earning more or less the same in their jobs, with a comparable set of financial responsibilities and yet there is a very great difference in the amount of money that each has. This brings us to a fundamental question:

Are we BORN with a high weird factor or can we influence it to go up or down by our behaviour, thoughts and actions? It is clearly an individualistic factor.

If it is fixed at birth, it has no prospect of ever changing. In other words, there is no possible chance on this planet that you can become rich if your weird factor is low. However much effort and time you put in, what ever degree of frugality you adopt, it simply will not happen.

On the other hand, if the weird factor is something that is in our control, however unyielding it happens to be, there exists the probability that we can do, think or behave in ways that can help us in our lives. I think that it is possible to devise similar formulae for non-monetary aspects of living such as love, leadership, influence, power, fame, intelligence, talent, etcetera. But let's not go off on a tangent and stay with money.

So Which Is It? Predestined Or ChangeableTo answer this question we need only examine the evidence, and there is rather a lot of it if you know where to look. You’ll find the answers in a place called history. But not world history. I'm talking about the history of every one of us from birth to the present moment. Let's conduct a little thought experiment using a fictitious individual's life as example. I want to present to you 5 randomly chosen scenarios out of the infinite that is possible with every one that is born on this planet. Don't forget, the individual is the same, it's only the circumstances that are different.

1. Born in 1970, went to school then to college and took business studies which culminated in a thriving business in real estate.

2. Born in 1970, went to school, dropped out, took interest in antiques, specialised and became an expert in fine art and now runs a chain of outlets.

3. Born in 1970, had an accident at 10, lost the ability to speak and longed to discover a way to help all such people and invented the speaking machine. Needless to say, wealth was only around the corner.

4. Born in 1970, lost both parents at an early age and suffered much in the hands of foster parents. This led to an internet business that drove all such people to the website which grew to something like one million hits per month. Advertising revenue came flooding in.

5. Born in 1970, left school without qualifications and took a job delivering parcels for a small local company. Within 5 years gained invaluable knowledge of the area and the business. Within another 5 years a single rival business was set up that could do the job more efficiently and more cheaply. Soon, there were branches in every major city in the country.

It certainly looks as though whatever the circumstances happen to be, this person is destined to make it one way or the other. Do we conclude then that who ever it was, the weird factor was extremely high. No. Definitely not. In every case there was something that this person wanted to do but it was never to make money. It was to help people in some corner of life or some avenue of interest. Money MUST BE, without exception a bi-product NOT the driving force. It must be SECONDARY to the activity itself. I believe that there is a hidden law which says that if you do something purely for money you will never get much of it. If you do something for other people to help them or to teach them or to make their lives a little easier in some respect, this law GUARANTEES unexpected returns and guess what - those returns might not even be financial but immense satisfaction which leads to happiness and contentment directly, instead of through wealth. And yes, happiness CAN be attained through wealth.

I firmly believe that the weird factor goes up as soon as we do something because we genuinely want to help people in some way, however insignificant it happens to be. But the greater this help is, the more number of people it affects, the higher will this factor go and there really isn't an upper limit.